Kimi Raikkonen produced a blistering display to snatch provisional pole from championship leader Fernando Alonso.
1 K Raikkonen (McLaren)
2 F Alonso (Renault)
3 M Webber (Williams)
4 G Fisichella (Renault)
5 JP Montoya (McLaren)
6 N Heidfeld (Williams)
7 J Trulli (Toyota)
8 D Coulthard (Red Bull)
Alonso had moved top after a lap of one minute, 14.125 seconds but Raikkonen followed him out on to the track and bettered that with 1:13.644.
But it was another miserable run for Michael Schumacher who finished 11th.
The session was red-flagged and delayed by nearly 20 minutes after Ralf Schumacher made a real mess of his car after badly colliding with a barrier.
Coming into Tabac, the Toyota driver clipped the barrier with his inside, left-front tyre which sent him carereering into the opposite barrier, decimating the entire right flank of his car.
That resulted in a 20-minute delay in qualifying, with marshals clearing away the debris and covering oil spills with sand and concrete.
Prior to that Mark Webber, who eventually finished third, had topped the standings.
But the delay did little to affect either Raikkonen or Alonso, along with Jarno Trulli the only men still to run.
First Alonso shaved almost half-a-second off polesitter Webber's time before Raikkonen repeated the feat moments later.
"It is important to be on pole or on the front row here so I am delighted," said Raikkonen.
"I think this is the best car I have ever driven here so I was confident we could have a good week and so far it has gone well. In Monaco anything can happen, so we need to do the best we can and hopefully try to win the race."
Alonso's team-mate Giancarlo Fisichella clocked the fourth best time, while Juan Pablo Montoya rounded off the top five.
Montoya, though, was then ordered to start from the back of the grid for causing a practice accident involving Ralf Schumacher, Coulthard and Jacques Villeneuve.
A statement from the stewards said: "As his progress was impeded in a minor manner, he braked and took exception to his lap being disturbed and subsequently drove unnecessarily slowly in a very fast part of the track.
"With the result that Jacques Villeneuve, who was also on a fast lap, was unable to stop and hit the rear of David Coulthard's car which then went into Ralf Schumacher's."
Michael Schumacher, however, had another torrid time, finishing one spot behind team-mate Rubens Barrichello.
The Ferrari duo, however, were about two-and-a-half seconds off Raikkonen's pace.
And Schumacher said: "This was definitely not a good session for us and obviously I am disappointed."
Monaco GP first qualifying results:
1. Kimi Raikkonen (Finland) McLaren 1:13.644
2. Fernando Alonso (Spain) Renault 1:14.125
3. Mark Webber (Australia) Williams 1:14.584
4. Giancarlo Fisichella (Italy) Renault 1:14.783
5. Juan Pablo Montoya (Colombia) McLaren 1:14.858
Montoya dropped to back of grid for Sunday's race
6. Nick Heidfeld (Germany) Williams 1:15.128
7. Jarno Trulli (Italy) Toyota 1:15.189
8. David Coulthard (Britain) Red Bull 1:15.329
9. Jacques Villeneuve (Canada) Sauber 1:15.921
10. Rubens Barrichello (Brazil) Ferrari 1:16.142
11. Michael Schumacher (Germany) Ferrari 1:16.186
12. Felipe Massa (Brazil) Sauber 1:16.218
13. Vitantonio Liuzzi (Italy) Red Bull 1:16.817
14. Patrick Friesacher (Austria) Minardi 1:18.574
15. Christijan Albers (Netherlands) Minardi 1:19.229
16. Tiago Monteiro (Portugal) Jordan 1:19.408
17. Narain Karthikeyan (India) Jordan 1:19.474
18. Ralf Schumacher (Germany) Toyota no time